Cities protest Volusia's CRA funding changes

Tuesday

Mar 12, 2013 at 8:32 PMMar 12, 2013 at 11:24 PM

Volusia County wants new rules for Community Redevelopment Areas that would give cities less money to use in blighted areas, require more evidence of progress and make it harder to set up new CRAs in the future.

ANDREW GANTSTAFF WRITER

Volusia County wants new rules for Community Redevelopment Areas that would give cities less money to use in blighted areas, require more evidence of progress and make it harder to set up new CRAs in the future. The cities, particularly the ones looking to clean up sections of town they consider blighted, aren't thrilled about it. The county, feeling protective over tax revenue it says it needs for basic services, is trying to make the case that a change — and more accountability — is only fair. "How can a publicly funded project achieve that which is undefined?" Property Appraiser Morgan Gilreath asked the County Council recently, pointing out today's CRAs don't have to achieve any measurable results to keep existing. "...If you play a football game or a basketball game, success means your score is higher than the other team's at the end of the game." Orange City Councilman Bill Crippen, whose city has spent roughly $129,000 trying to put together a new CRA of its own, said the county's proposal is like playing a game of football and "while the ball is in the air, you change the rules." Over the past decade, the CRAs in Volusia have funneled about $165 million in tax revenue into specific areas targeted for redevelopment. A large chunk of that is money the county would like to see stay in its general fund. "It's different times," pointed out Councilwoman Pat Northey, who's long been talking about making up for tax revenue lost during the recession. "It's not the '90s" anymore. CRAs work by setting a baseline for property values in a certain blighted area when they're created. Over the years, if those values increase, the property tax revenue generated by the higher value is set aside for projects within the CRA's boundaries. Of that $165 million set aside for local CRAs over the past 10 years, records show about $100 million has come from county or hospital district taxes. County Manager Jim Dinneen's proposal: Change the funding formula so the county pays less. Instead of paying all of the extra tax revenue on the full property-value increase inside the CRA, Volusia wants to use the rest of the county's growth as a measuring stick. In essence, the county will be adjusting for inflation — take the growth in the CRA minus the growth seen in the rest of the county, and that's the tax revenue the CRA will get. "Those values that grew without regard to the CRA, that were just normal growth whether the CRA was there or not, would stay with the county," Dinneen said. "... So we keep that inflation that would occur normally without any effort on the part of the CRA." That's the main part of the county's plan that has city leaders like Crippen and Ormond Beach Mayor Ed Kelley feeling sort of baited-and-switched. "That's nuts; that's stupid," Kelley said of the new formula. "Realistically, think about it. The county values appreciate by 3 percent. The CRA appreciates by 1 percent. "I just don't see that it's workable. Either you're going to allow the CRAs to redevelop an area that's also within Volusia County, or you're not." In Orange City, the council has had designs on redeveloping its downtown core near U.S. 17-92 for at least three years. City Manager Jamie Croteau said the city spent money on the redevelopment plans it submitted to the county last year after confirming with Dinneen that it wouldn't be money wasted. "I called him before we did our redevelopment plan because it was very expensive," she said. "I said, 'I don't want to spend (the money) to do this (if changes were coming).' He said, 'No, no, no, go ahead. You need to proceed as if nothing has happened.' We spent the money." Then the county's changes became imminent. Orange City's plan called for the county's contribution over 20 years to be $2.4 million, Croteau said. The proposed changes, though, would limit that to $162,000 over 20 years, she said. "The changes they want to make render (CRAs), I think, ineffective," she said. Deltona, another city eyeing a new CRA, hasn't spent much other than staff time on its redevelopment plans thus far, said Chris Bowley, the city's development services director. Now, that plan — aimed at improving Deltona Boulevard, the oldest commercial corridor in the city — is essentially "dead," Mayor John Masiarczyk said. There are other proposals that even the cities agree make sense. In the future, the County Council (not just the local CRA board) will approve the CRA's plan. The county will also require its contribution go toward capital projects only, and the council will pre-approve debt. And the lifespan of future CRAs will be capped at 20 years. Also in the works is a tweaking of the definition of "blight," which has been a difficult one to pin down. In the future, when it's determining whether an area is blighted, the county wants to review five years of property values in its boundaries. From Volusia's perspective, the timing is right to change its formula because property values are low. The last discussion ended with a unanimous vote to put the proposals in writing, and it's likely to come up for a vote March 21. Councilwoman Deb Denys said the changes are a welcome alternative to outright eliminating CRA funding. "We were at no (to new CRAs), so at least we're at yes," Denys said. "The whole economic climate has changed. It's not like it was before for any of us. The council, going forward, we have some tough decisions to make. It's just not business as usual. It can't be."

-- Staff writer Mark Harper contributed to this report.

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